Airbnb Host Taxes in District of Columbia - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in District of Columbia

The vibrant hospitality scene in the District of Columbia, fueled by tourism and events, has made Airbnb hosting a popular income source. However, revenue generated through short-term rentals is subject to both federal and District of Columbia taxation. Understanding these obligations is crucial for compliance and maximizing potential deductions.

District of Columbia State Tax Rules for Rental Income

As a resident of the District of Columbia, income earned from Airbnb hosting is subject to District income tax. The District utilizes a graduated income tax system, meaning the tax rate increases as your income rises. All income, including that from short-term rentals, must be reported on a District of Columbia individual income tax return. The primary form for self-employed individuals and those with business income is Form D-140, Individual Income Tax Return, along with Schedule R, Rental Real Estate Income. For the 2025 tax year (filing in 2026), the tax rates are tiered, ranging from 4.0% to 8.5% depending on your income bracket. It's important to note that the District also has a standard deduction, which can reduce your taxable income. Furthermore, the District of Columbia Office of Tax and Revenue (OTR) requires accurate reporting of all rental income, and may cross-reference information with Airbnb and other platforms. Failure to report income can result in penalties and interest. The OTR also offers resources for small businesses, including information on estimated tax payments, which are generally required if you expect to owe $1,000 or more in taxes. Keep meticulous records of all income and expenses related to your Airbnb activity to ensure accurate filing and maximize potential deductions. You can find more information and access tax forms on the District of Columbia Office of Tax and Revenue website: https://otr.dc.gov/

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for an Airbnb host, as it determines if you owe self-employment tax. The IRS classifies rental activity based on the level of services provided.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Passive Income) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Think of it as simply renting out a space.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, providing toiletries beyond basic soap, concierge services), you report on Schedule C and must pay the 15.3% self-employment tax. This is treated as running a lodging business.

Top Tax Write-offs for District of Columbia Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible.
• Mortgage Interest & Property Taxes: Deduct the portion corresponding to the rental space and period. If the property is used for both personal and rental purposes, you must allocate these expenses accordingly.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items, professional cleaning, and supplies. Routine maintenance is deductible; improvements that increase the property's value are depreciated.
• Depreciation: A powerful but complex deduction for wear and tear on your property. Often requires a tax professional to calculate correctly.